Don't Fence Me In: Reforming Trade and Investment Law to Better Facilitate Cross-Border Data Transfer

56 Pages Posted: 4 Oct 2016 Last revised: 20 Mar 2017

See all articles by Andrew D. Mitchell

Andrew D. Mitchell

University of Melbourne - Law School

Jarrod Hepburn

University of Melbourne - Law School

Date Written: October 1, 2016

Abstract

The transfer of data across borders supports trade in most service industries around the world as well as the growth of traditional manufacturing sectors. However, several countries have begun to adopt laws impeding the cross-border transfer of data, ostensibly in pursuit of policy objectives such as national security, public morals or public order, and privacy. Such domestic measures create potential concerns under both international trade law and international investment law. Accordingly, recent trade and investment negotiations such as the Trans-Pacific Partnership Agreement (TPP) include specific provisions mandating the permissibility of cross-border data transfer and prohibiting data localisation in certain circumstances. Although World Trade Organization law contains no such specific provisions, restrictive data transfer measures could breach the non-discrimination and market access disciplines under the General Agreement on Trade in Services (GATS), except to the extent that they are justified under the general exception in GATS art XIV. International investment law may also apply to measures restricting data transfer, particularly if investment arbitrators take into account holistic changes in the digital economy to interpret the scope of covered investments and the meaning of investment obligations. The application of general trade and investment law disciplines to data transfer restrictions and localisation requirements remain uncertain. The more specific provisions in the TPP, while welcome, fail to address this uncertainty. These fields must be better synchronised with each other in respect of data transfer and with the realities of the digital economy. A comprehensive legal framework ― including coverage of trade and investment law ― and extensive policy coordination across a variety of stakeholders would better enable open, secure and efficient data flows across borders.

Suggested Citation

Mitchell, Andrew D. and Hepburn, Jarrod, Don't Fence Me In: Reforming Trade and Investment Law to Better Facilitate Cross-Border Data Transfer (October 1, 2016). 19 Yale Journal of Law and Technology 182 (2017). Available at SSRN: https://ssrn.com/abstract=2846830

Andrew D. Mitchell (Contact Author)

University of Melbourne - Law School ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia
+61383441098 (Phone)
+61393472392 (Fax)

HOME PAGE: http://www.law.unimelb.edu.au/staff/Andrew%20Mitchell

Jarrod Hepburn

University of Melbourne - Law School ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia

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